Microsoft Points out, real money in with Windows 8 launch

Death to virtual currency! After seven years of Microsoft Points, the Xbox company is finally going to phase out its virtual currency in favor of regular dollar prices for downloadable games, Xbox Avatar items, movies, and Xbox Music on its Xbox Live network. The shift is coming sooner rather than later, as beta versions of the new Windows 8 indicate that when that operating system releases on Oct. 26, it will brush Microsoft Points away from all Microsoft platforms. Microsoft has yet to comment on the change, but images posted by The Verge seem to confirm the change.

Windows 8 has been accused of many consumer crimes ahead of its release, so it’s interesting that a platform so widely criticized is also bringing with it a change long asked for by users. The Microsoft Points virtual currency structure equates $1 with 80 points. In someone wants to rent a movie through Xbox Live that costs 320 points, they’re forced to buy a $5 package of 400 points, leaving them with 80 left over. Almost nothing on the service can be purchased for that amount, meaning that Microsoft got you to give them an extra dollar for nothing at all.

This isn’t an altruistic turn for Microsoft, as consumers likely wouldn’t tolerate Microsoft Points for much longer, at least for broad entertainment purchases. Its competitors have already dropped virtual currencies—Nintendo finally abandoned the similar Wii/DSi Points currency for actual money when it opened the eShop. Apple’s influence can’t be understated either. Microsoft has been forced to emulate Apple as much as possible in the construction of Windows 8, and that includes mimicking the iTunes App Store’s pricing structure. Since Windows and Xbox won’t be mutually exclusive environments once the Xbox 720 comes out, naturally Xbox Live had to change as well.

The change isn’t much of a surprise either, as the company’s hinted that Microsoft Points would be phased out all year. Rumors first emerged in January that Microsoft Points would be phased out to give Microsoft parity with Apple and Google in the mobile market place. In August, a number of Xbox Avatar popped up on Xbox Live with real money prices on them rather than point prices. Microsoft claimed it was a mistake at the time. “A few Avatar items appeared with an option to purchase with local currency, instead of Microsoft Points, said a company spokesman, “The display error doesn’t signal a change in payment options, but rather an error in how offers were configured in our services which resulted in an inconsistent experience.”